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Family Conversations at the Holidays

When families get together to celebrate the holidays, it is a great opportunity to discuss wealth transfer with the next generation. Too often, families do not communicate about finances and are not educated on the basics of estate planning. This lack of knowledge can cause hardship, both financial and emotional, which can be reduced by advanced planning. According to’s 2022 Survey, more than 50% of Americans believe estate planning is important but only 33% have a will. 

For those who may not have a customized estate plan, your state of residence provides for disposition of your assets, should you pass intestate (without a will – see links below).

If you don’t want your state government to dictate what happens to your assets, property, and custody of minor children, then you need to have a written plan that encompasses the growth, conservation, and transfer of your assets.   The goal is to develop a strategy that maintains your lifetime financial security while ensuring that the transfer of your property and assets at death is as you intend.  An estate plan will also take into consideration the unique circumstances of your family and the potential costs of different distribution methods.  

Hands of man photographing family sitting at dining table. Multi-generation family is enjoying garden party. They are celebrating at back yard.

The first step to transferring wealth to the next generation is communication. During this holiday season, consider sparking a conversation about family assets among the different generations. This discussion may or may not include expectations on how wealth transfer might occur for your family. If your family is lucky to have significant wealth, these conversations are important to ensure the next generation is well-prepared to continue the family legacy and to understand the scope and potential obligations of the family’s wealth. These conversations are stepping stones to a clearly communicated plan and opportunity for the next generation to clarify and provide different perspectives to be considered, and the goal be to foster continued dialogue.

The next step is providing financial literacy. It is vital that the next generation has the tools they need to carry on the family legacy and successfully manage the family’s wealth. Depending on the level of interest, you may want to include further discussions with a financial professional to help explain concepts and plans that are already in place. The next generation should be confident in the wealth management process.

Lastly, it is important to address and consider the most tax efficient manner of preserving and transferring wealth to future generations. For families of significant wealth, you may want to explore different strategies such as annual gifting or trusts.  The amount you can gift tax-free in 2023 is $17,000 per recipient, increasing to $18000 in 2024. It’s a great way to give to your loved ones without using up your lifetime gift and tax exemption, which is now $12.92 million and increases to $13.61 million next year. Anything above the exemption is taxed at 40%. Understand that staying abreast of the changing estate and tax laws can significantly affect your transfer of wealth, especially for high-net-worth families.

As a relationship manager, I often speak to my clients about wealth transfer to the next generation because it is important to my clients’ financial well-being and their legacy. We often act as the “quarterback” on your professional team, working with you, your family, accountant, and attorney to create and implement an estate plan. Your team of professionals can assist in determining the best strategy for transferring wealth and leaving the type of legacy that is meaningful to you.

If you live in Virginia, here is a link to the Virginia law:

If you live in Maryland, here is a link:

If you live in Washington DC, here is a link:

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  • This information is intended to be educational in nature, and not as a recommendation of any particular strategy, approach, product, security, or concept. These materials are not intended as any form of substitute for individualized investment advice. The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. You should not treat these materials as advice in relation to legal, taxation, or investment matters. Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisers.
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